The Internet is all aflutter. My conservative and libertarian Facebook friends are madly posting memes. President Obama gave himself, or at least the government, credit for all individual success and business creation.
Or did he? Watch the speech yourself.
Maybe I’m wrong, and maybe I am giving the President too much slack, but it sounded to me that the “that” in “You didn’t build that” refers to roads and bridges, not the business proper. Sam Walton’s family is rich in part because Sam made use of the bypasses the government built with tax dollars. Wal-Mart should pay taxes for the privilege of slowing down traffic on roads that were originally built for speed, not shopping. If this is the point Obama was trying to make, I agree with him.
Then again, Obama did throw in another point, another worldview, which is insulting to many successful entrepreneurs. Obama implied that the distinguishing feature that makes some people extraordinarily successful is help from others – on top of smarts and hard work. This is a correct model for those who had their talents recognized early, went to the best schools, and were fast-tracked to the top. It applies to Obama: I was getting spams from one of the Democratic national committees featuring pictures of Obama years before Obama ran for president. And he was fast tracked at an embarrassing pace for the Nobel Peace Prize.
But this is not the path of many, or even most, successful entrepreneurs. The essence of entrepreneurship is getting off the paths the world lays out for you and taking risks. Bill Gates dropped out of Harvard to start Microsoft. He shunned the surefire path to comfortable, but moderate, success. Obama and his followers would do well Paul Graham’s excellent essay on Inequality and Risk.
That said, the President was not calling for the punish-the-rich tax rates we had back in the Eisenhower days. He was calling for bumping the rates back up to Clinton era levels, which history shows were manageable. I fear he is right, but to shame the Right, I suggest a modified argument:
If you are a fat cat capitalist, you can thank the U.S. military that you got to keep you wealth, and that you aren’t rotting in a Russian re-education camp. That Cold War was expensive, and we haven’t paid all the bills yet. Pay up. Come to think of it, we haven’t finished paying for World War II either. If you own shares in a corporation, be happy you live in a country with the rule of law that allows you to set up a complicated legal entity such as a corporation. If you don’t think the government is providing you a service, try setting up a corporation in Somalia sometime. Now fork it over. If you own intellectual property, you not only use our courts and police system; you are using our State Department to protect your rights overseas. Pay up. If you own big block stores on America’s bypasses, you are cashing in on taxpayer funded roads meant for fast travel, and the efforts of that carrier battle group which keeps the Persian Gulf open so people can afford to drive out to you in their SUVs. So quit whining if we spend a few tax dollars on renewing the urban cores you helped to gut.
Payment for services rendered. It’s that simple. The Koch brothers do have some whining rights as they did dump a few million into the Ed Clark campaign back in 1980. Rich Republicans who supported Reagan, on the other hand, supported some pretty expensive projects. It’s time to pay the bills. Santa Claus does not live in Washington, D.C.